<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Bank Plus Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[PRELIMINARY]
BANK PLUS CORPORATION
4565 COLORADO BOULEVARD
LOS ANGELES, CALIFORNIA 90039
March [30], 1998
Dear Stockholder:
You are cordially invited to attend the 1998 annual meeting of stockholders
(the "Annual Meeting") of Bank Plus Corporation (the "Company"). The Annual
Meeting will be held on Wednesday, April 29, 1998, at 11:00 a.m. at the
corporate headquarters of the Company at 4565 Colorado Boulevard, Los Angeles,
California 90039. At the Annual Meeting, you will be asked to (i) elect three
persons to the Board of Directors of the Company; (ii) approve an amendment to
the Company's Certificate of Incorporation to change the name of the Company
to iBank Corporation; (iii) ratify the appointment of Deloitte & Touche LLP as
the Company's independent public accountants for 1998; and (iv) transact such
other business as may properly come before the Annual Meeting. Following the
meeting, management will be pleased to answer your questions about the
Company.
Your Board of Directors recommends that you vote (1) FOR the persons it has
nominated for election to the Board of Directors, (2) FOR approval of the
amendment to the Company's Certificate of Incorporation, and (3) FOR
ratification of the selection of Deloitte & Touche LLP as the Company's
independent public accountants.
I HOPE YOU WILL BE ABLE TO ATTEND THIS MEETING IN PERSON. WHETHER OR NOT YOU
EXPECT TO ATTEND, I URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
SO THAT YOUR SHARES WILL BE REPRESENTED.
Enclosed herewith is a copy of the Company's Annual Report on Form 10-K,
including financial statements for the year ended December 31, 1997, as filed
with the Securities and Exchange Commission.
If you have any questions, please call Neil L. Osborne, the Company's
Investor Relations Officer, at (818) 549-3116. I look forward to seeing you on
Wednesday, April 29, 1998.
Sincerely,
/s/ Gordon V. Smith
Gordon V. Smith
Chairman of the Board
<PAGE>
[PRELIMINARY]
BANK PLUS CORPORATION
4565 COLORADO BOULEVARD LOS ANGELES, CALIFORNIA 90039
----------------
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
----------------
The 1998 annual meeting of stockholders (the "Annual Meeting") of Bank Plus
Corporation (the "Company") will be held at the corporate headquarters of the
Company at 4565 Colorado Boulevard, Los Angeles, California 90039 on Wednesday,
April 29, 1998, at 11:00 a.m. local time for the following reasons:
1. To elect three persons to the Board of Directors of the Company;
2. To approve an amendment to the Company's Certificate of Incorporation
to change the Company's name to iBank Corporation;
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent public accountants for 1998; and
4. To transact such other business as may properly come before the Annual
Meeting or any or all adjournments or postponements thereof.
Only holders of Common Stock, $0.01 par value, of record at the close of
business on March 2, 1998 will be entitled to notice of and to vote at the
Annual Meeting. A list of such stockholders will be open for examination by any
stockholder at the meeting and for a period of ten days prior to the date of
the meeting during ordinary business hours at the corporate headquarters of the
Company.
EACH STOCKHOLDER, EVEN THOUGH HE OR SHE MAY NOW PLAN TO ATTEND THE ANNUAL
MEETING, IS REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY CARD AND TO RETURN IT
WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Any stockholder present at
the meeting may withdraw his or her proxy and vote personally on each matter
brought before the meeting.
By Order of the Board of Directors,
/s/ Godfrey B. Evans
Godfrey B. Evans
Corporate Secretary
March [30], 1998
<PAGE>
[PRELIMINARY]
BANK PLUS CORPORATION
4565 COLORADO BOULEVARD
LOS ANGELES, CALIFORNIA 90039
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 29, 1998
----------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement (the "Proxy Statement") is furnished in connection with
the solicitation of proxies by the Board of Directors of Bank Plus Corporation
("Bank Plus" or the "Company") for use at the 1998 annual meeting of
stockholders of Bank Plus (the "Annual Meeting") to be held at the time and
place, and for the purposes, set forth in the accompanying Notice of 1998
Annual Meeting of Stockholders and at any adjournments or postponements
thereof. It is anticipated that the Proxy Statement will first be mailed to
the holders of the Company's common stock, $0.01 par value (the "Common
Stock"), on or about March [30], 1998.
A person giving the enclosed proxy has the power to revoke it at any time
before it is exercised by (1) attending the Annual Meeting and voting in
person, (2) executing and delivering a proxy for the Annual Meeting bearing a
later date, or (3) delivering written notice of revocation to the Secretary of
the Company prior to the Annual Meeting.
The expense of preparing, assembling, printing and mailing the Notice of
1998 Annual Meeting of Stockholders, this Proxy Statement and the materials
used in the solicitation of proxies for the Annual Meeting will be borne by
the Company. Following the mailing of this Proxy Statement, solicitation of
proxies may be made by mail, or by personal calls upon, or telephonic or
electronic communications with, stockholders or their personal representatives
by directors, officers, financial advisors and employees of the Company, none
of whom will be specially compensated for such services. Although there is no
formal agreement to do so, the Company may reimburse banks, brokerage houses
and other custodians, nominees and fiduciaries for their reasonable expenses
in forwarding the Proxy Statement to stockholders whose Common Stock is
entitled to be voted at the Annual Meeting and is held of record by these
entities. In addition, the Company has retained D.F. King & Co., Inc. ("D.F.
King") to assist in the solicitation of proxies. D.F. King may solicit proxies
by mail, telephone, telegraph and personal solicitation, and will request
brokerage houses and other nominees, fiduciaries, and custodians nominally
holding shares of Common Stock of record to forward proxy soliciting material
to the beneficial owners of such shares. For these services, the Company will
pay D.F. King a fee estimated not to exceed $3,000, plus reimbursement for
reasonable out-of-pocket expenses.
VOTING SECURITIES
The Board of Directors has fixed the close of business on March 2, 1998, as
the record date for the determination of stockholders entitled to receive
notice of, and vote at, the Annual Meeting (the "Record Date"). The Company is
authorized to issue 78.5 million shares of Common Stock, which is the only
class of the Company's capital stock entitled to vote at the Annual Meeting.
On the Record Date, [19,394,592] shares of Common Stock were outstanding and
entitled to vote.
1
<PAGE>
Each share of Common Stock entitles the record holder on the Record Date to
one vote for each of the open director positions and on each proposal to be
voted on at the Annual Meeting. A majority of the outstanding shares of Common
Stock entitled to vote shall constitute a quorum. Abstentions, including those
stockholders who attend the Annual Meeting but abstain from voting, and those
stockholders who return their proxy cards to the Company indicating abstention
from voting, will be treated as shares present and entitled to vote for
purposes of determining the presence of a quorum. If a broker indicates on the
proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present
and entitled to vote with respect to that matter. Directors will be elected
(Proposal Number 1) by a plurality of the votes of the shares of Common Stock
present in person or represented by proxy and entitled to vote on the election
of directors. Approval of the amendment to the Company's Certificate of
Incorporation to change the name of the Company (Proposal Number 2) requires
the affirmative vote of a majority of the outstanding shares of Bank Plus
Common Stock, while ratification of the appointment of the Company's
independent public accountants (Proposal Number 3) and any stockholder
proposals that properly come before the Annual Meeting require the affirmative
vote of a majority of the shares of Common Stock present in person or
represented by proxy at the Annual Meeting. Because approval of Proposal
Number 2 requires the affirmative vote of a majority of the outstanding shares
of Bank Plus Common Stock, abstentions from voting will have the same effect
as votes against the proposal. Therefore, it is very important that every
stockholder return a proxy, whether or not such stockholder plans to attend
the Annual Meeting.
PROPOSAL NUMBER 1:
ELECTION OF DIRECTORS
At the Annual Meeting, stockholders of Bank Plus will be asked to vote on
the election of three directors. The three nominees receiving the highest
number of votes at the Annual Meeting will be elected directors of the
Company. To fill these three board positions, the enclosed proxy, unless
indicated to the contrary, will be voted FOR the nominees listed below and on
the enclosed proxy card.
Set forth below are the names of the persons nominated by the Board of
Directors for election as directors at the Annual Meeting. Your proxy, unless
otherwise indicated, will be voted FOR the election of Messrs. Barker, Condon
and Smith to serve for a term of three years. For a description of each
nominee's principal occupation and business experience during the last five
years and present directorships, please see the following section entitled
"Directors and Executive Officers--Nominees for Director."
Bank Plus has been advised by each nominee named in this Proxy Statement
that he is willing to be named as such herein and is willing to serve as a
director if elected. However, if any of the nominees should be unable to serve
as a director, the enclosed proxy will be voted in favor of the remainder of
those nominees not opposed by the stockholder on such proxy and may be voted
for a substitute nominee selected by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF MESSRS.
BARKER, CONDON AND SMITH AS DIRECTORS OF BANK PLUS.
2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The following table sets forth the names and certain information with
respect to the three persons nominated by the Board of Directors for election
as directors of Bank Plus at the Annual Meeting and each other director of
Bank Plus who will continue to serve as a director after the Annual Meeting.
Except for Mr. Condon and Mr. Sullivan, each nominee and each director listed
below served on the board of directors of Fidelity Federal Bank, A Federal
Savings Bank ("Fidelity" or the "Bank"), prior to becoming a director of Bank
Plus. Fidelity is a wholly-owned subsidiary of Bank Plus, and Bank Plus became
the holding company for Fidelity and Gateway Investment Services, Inc.
("Gateway") on May 16, 1996 (the "Reorganization").
<TABLE>
<CAPTION>
FOR TERM
NOMINEES FOR TO DIRECTOR POSITIONS HELD WITH BANK PLUS, FIDELITY
DIRECTOR AGE EXPIRE SINCE AND GATEWAY
------------ --- -------- -------- ---------------------------------------
<C> <C> <C> <C> <S>
Norman Barker, Jr. 75 2001 1994(1) Director of Bank Plus
Robert P. Condon 56 2001 -- Executive Vice President of Fidelity;
Vice Chairman, Chief Executive Officer and Director of Gateway
Gordon V. Smith 65 2001 1996(1) Chairman and Director of Bank Plus
<CAPTION>
CONTINUING DIRECTORS
--------------------
<C> <C> <C> <C> <S>
Waldo H. Burnside 69 2000 1994(1) Director of Bank Plus
George Gibbs, Jr. 67 1999 1994(1) Director of Bank Plus and Fidelity
Richard M. Greenwood 50 1999 1992(1) Vice Chairman, President, Chief Executive Officer and Director of Bank Plus;
Chairman, Chief Executive Officer and Director of Fidelity; Chairman of Gateway
Lilly V. Lee 67 2000 1994(1) Director of Bank Plus, Fidelity and Gateway
Mark Sullivan III 56 2000 1997 Director of Bank Plus
</TABLE>
- --------
(1) For periods prior to the Reorganization, the relevant director served as a
director of Fidelity.
Set forth below is certain information concerning the principal occupation
and business experience of each of the persons listed in the table above
during the past five years.
NOMINEES FOR DIRECTOR
MR. BARKER served as Chairman of the Board of Fidelity from August 1994
until May 1996, and as Chairman of the Board of Bank Plus from May 1996 until
July 1997. He was Chairman of the Board and Chief Executive Officer of First
Interstate Bank of California until his retirement in 1986. He served as
Chairman of the Board of Pacific American Income Shares, Inc., a bond fund,
from 1974 until 1998. Mr. Barker also serves as a director of TCW Convertible
Securities, Inc. and ICN Pharmaceuticals, Inc.
MR. CONDON joined Gateway as President, Chief Executive Officer and Director
in 1993 and became an Executive Vice President of Fidelity in 1994. Prior to
joining Gateway, Mr. Condon served as General Manager of WellPoint Life
Insurance Company, a subsidiary of Blue Cross of California. Before that, he
was President and Chief Executive Officer of CalFed Investment Services, in
charge of the development and sale of alternative investment products through
the bank branch network.
MR. SMITH was named Chairman of the Board of Bank Plus effective July 30,
1997. He is chairman, founder and principal stockholder of Miller & Smith,
Inc., a diversified real estate investment and construction company in the
Washington, D.C. area. Mr. Smith also serves as a director of Crown Northcorp,
Inc., a real estate management company located in Columbus, Ohio. From 1987
until 1993, he served as Chairman of the Board, Chief Executive Officer and
director of Providence Savings and Loan Association in Virginia.
3
<PAGE>
CONTINUING DIRECTORS
MR. BURNSIDE served as President of Carter Hawley Hale Stores, Inc. until
his retirement in 1991. He was a director of both Bank of America, N.A. and
BankAmerica Corp. from 1992 until 1993. Mr. Burnside currently serves as a
director of the Automobile Club of Southern California and as a member of the
boards of a number of educational, charitable, and municipal service
organizations.
MR. GIBBS was a principal and senior vice president of Johnson & Higgins, an
insurance agency, from 1987 until his retirement in 1997. Prior to joining
Johnson & Higgins in 1987, he was with Stewart Smith West for 33 years where
he was the founding director of Associated International Insurance Company and
Calvert Insurance Company. Mr. Gibbs currently serves as a director of Bank
Plus and Fidelity, on the board of First Alliance Corporation and on the
boards of a number of educational and charitable trusts and foundations.
Johnson & Higgins (now known as J&H Marsh & McLennan) is the Company's
insurance broker and a consultant to the Company on certain health benefit
matters. See "Related Party Transactions--Insurance Commissions" and "--First
Alliance Transaction."
MR. GREENWOOD joined Fidelity in June 1992 as President and Chief Executive
Officer and served as Chairman of the Board from June 1992 to August 1994. Mr.
Greenwood also served as President and Chief Executive Officer and a director
of Fidelity's former holding company, Citadel Holding Corporation ("Citadel"),
from June 1992 to August 1994. Since the Reorganization in May 1996, Mr.
Greenwood has served as Vice Chairman, President and Chief Executive Officer
of Bank Plus, and as Chairman of the Board and Chief Executive Officer of
Fidelity. Prior to joining Fidelity, he served as Chief Financial Officer of
CalFed, Inc. and California Federal Bank from 1990 to 1992.
MS. LEE is the Chairman of the Board of Lilly International, Inc. and a
director of Bank Plus, Fidelity and Gateway. Ms. Lee formerly served as
Chairman of the Board of the Thrift Depositor Protection--Regional Oversight
Board and was a member of the boards of directors of CalFed, Inc. and Trust
Services of America. She currently serves on the boards of a number of
political, educational, charitable and industry organizations.
MR. SULLIVAN is a co-founder of the Small Business Funding Corporation, a
company providing a secondary market facility for the purchase and
securitization of non-guaranteed small business loans, and has served as its
President since 1996. In 1997, Mr. Sullivan became a member of the board of
directors of Saul Centers, Inc., a Maryland real estate investment trust. From
1989 through 1996, Mr. Sullivan practiced law in Washington, D.C., advising
senior management of financial institutions on legal and policy matters.
COMMITTEES OF THE BOARD OF DIRECTORS
In 1997 Bank Plus had standing Executive, Audit and Compensation Committees.
At its meeting on October 29, 1997, the Board approved new committee
assignments and voted to expand the responsibilities of the Executive
Committee to include nominating and board development functions. The principal
responsibilities of these committees and the number of meetings of each held
in 1997 appear below.
Executive Committee. Subject to the authority conferred on the Company's
other committees, the Executive Committee is empowered to exercise all
authority in lieu of the Board which may be exercised by a committee of the
Board pursuant to applicable law. The Executive Committee held two meetings in
1997. As of October 29, 1997, the Executive Committee assumed nominating and
board development functions. Any stockholder who wishes to recommend a
prospective nominee for the Board of Directors for the Executive Committee's
consideration may do so by giving the candidate's name and qualifications to
the Secretary of the Company, 4565 Colorado Boulevard, Los Angeles, California
90039. The members of the Executive Committee prior to October 29, 1997 were
Mr. Greenwood, Chairman, Messrs. Barker and Gibbs and Ms. Lee. As of October
29, 1997, the Executive Committee consisted of Mr. Smith, Chairman, and
Messrs. Barker (non-voting emeritus member), Gibbs and Greenwood.
4
<PAGE>
Audit Committee. The Audit Committee is a joint committee with Fidelity's
Audit Committee. Its responsibilities are generally to assist the Board and
Fidelity's Board in fulfilling their legal and fiduciary responsibilities
relating to accounting, audit and financial reporting policies and practices
of the Company and its subsidiaries. The Audit Committee also, among other
things, recommends to the Board the engagement of the Company's independent
accountants; monitors and reviews the quality and activities of the Company's
internal audit function and those of its independent accountants; and monitors
the adequacy of the Company's operating and internal controls as reported by
management, the independent accountants and internal auditors. In 1997, the
Audit Committee held four meetings. The Bank Plus members of the joint Audit
Committee are Mr. Gibbs, Chairman, and Mr. Burnside.
Compensation Committee. The Compensation Committee is a joint committee with
Fidelity's Compensation Committee. It is authorized to review salaries and
compensation, including non-cash benefits, of directors, officers and other
employees of the Company and its subsidiaries and to recommend to the Board
salaries, remuneration and other forms of additional compensation and benefits
as it deems necessary. The joint Compensation Committee held five meetings in
1997. Prior to October 29, 1997, the Bank Plus members of the joint
Compensation Committee were Mr. Barker, Chairman, and Mr. Smith. Thereafter,
the Bank Plus representatives on the joint Committee became Mr. Sullivan,
Chairman, Ms. Lee and Mr. Smith.
MEETINGS OF THE BOARD OF DIRECTORS
In 1997, there were ten meetings of the Board of Directors of Bank Plus. All
directors attended at least 75% of the aggregate of meetings of the Board of
Directors and the committees of the Board on which they served, in each case,
after the election of such individual to the Board or such committee.
EXECUTIVE OFFICERS
Set forth below are the executive officers of the Company and the Bank
(other than Messrs. Condon and Greenwood--see "Directors" above), together
with the positions currently held by those persons.
<TABLE>
<CAPTION>
NAME AGE POSITION HELD WITH BANK PLUS AND FIDELITY
- ---- --- -----------------------------------------
<S> <C> <C>
James E. Stutz.......... 54 President, Chief Operating Officer and Director of Fidelity
Stephen J. Austin....... 58 Executive Vice President, Risk Evaluation Group
Godfrey B. Evans........ 44 Executive Vice President, General Counsel and
Corporate Secretary of Bank Plus and Fidelity
W.C. Taylor III......... 40 Executive Vice President and Chief Lending Officer of Fidelity
Dennis J. McNamara...... 44 Senior Vice President and Treasurer of Fidelity
Richard M. Villa........ 33 Senior Vice President, Controller and Chief Accounting Officer of
Bank Plus and Fidelity
</TABLE>
MR. STUTZ joined Fidelity in 1994 as Executive Vice President, Retail
Banking. Prior to joining Fidelity, Mr. Stutz served since 1985 as Executive
Vice President and Chief Operating Officer, Consumer Banking, of HomeFed Bank,
where he was responsible for a 215 branch network. Mr. Stutz was also
Chairman, President and Chief Executive Officer of Columbus Savings, a wholly
owned subsidiary of HomeFed Corporation, where he was responsible for the
consolidation of several savings institutions and the subsequent merger of the
company into HomeFed Bank. Mr. Stutz was named President of Fidelity in June
1996 and became a director of Fidelity on October 29, 1997.
MR. AUSTIN joined Fidelity in 1995 as Senior Vice President and Internal
Audit Director. Before joining Fidelity, Mr. Austin was employed at Union
Federal Bank in Brea, California from 1991 until 1995 in various financial
management positions including, most recently, Senior Vice President and Chief
Financial Officer. Mr. Austin became an Executive Vice President of the Bank
in June 1996.
5
<PAGE>
MR. EVANS joined Fidelity as Senior Vice President and Senior Corporate
Counsel in 1987 and has been General Counsel and Corporate Secretary of
Fidelity since 1989 and 1990, respectively, and of Bank Plus since its
formation. Mr. Evans became an Executive Vice President of Fidelity in 1994.
MR. TAYLOR joined Fidelity in 1993 as Senior Vice President in charge of
loan administration and was appointed Executive Vice President and Chief
Lending Officer in 1994. From 1992 through 1993, Mr. Taylor was employed as a
Senior Vice President and Senior Lending Officer at Metrobank Home Lenders.
MR. MCNAMARA joined Fidelity in August 1996 as Senior Vice President &
Treasurer. Before that, he worked for Kleinwort Benson, an investment banking
concern, for eight years, serving most recently as a managing director for
Kleinwort Benson Capital Management. He holds an MBA from the University of
Chicago.
MR. VILLA joined Fidelity in April 1996 as Vice President and Corporate
Planning Manager. Before joining Fidelity, Mr. Villa worked as an audit
manager in the internal audit department of Union Bank and, from 1993 until
1996, was employed as a manager by the public accounting firm of Deloitte &
Touche LLP. Mr. Villa was named Senior Vice President and Controller of Bank
Plus and Fidelity in February 1997.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The report of the Compensation Committee (the "Committee") shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of
1933, as amended (the "Securities Act"), or under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), except to the extent that the
Company specifically incorporates this report by reference, and shall not
otherwise be deemed filed under such acts or regulations.
COMMITTEE COMPOSITION
The Committee is composed of independent, non-employee members of the Boards
of Directors of Bank Plus and its subsidiary, Fidelity Federal Bank (the
"Bank"). It is advised by members of management and outside experts in the
field of compensation program design. The Committee administers, reviews, and
recommends for full Board approval each of the elements of the executive
compensation program of Bank Plus and the Bank. Membership of the Committee
changed in October 1997.
COMPENSATION PHILOSOPHY
It is the philosophy of the Committee, Bank Plus and the Bank to provide
executives with total compensation opportunities that are competitive with the
marketplace while emphasizing stock ownership over annual cash compensation.
To ensure competitiveness, the Committee reviews compensation levels of a peer
group of California financial institutions considered as competitors for
executive talent.
Compensation practices (i.e., program design) of the California peer group
and of similar size U.S. financial institutions are also reviewed to assess
compensation design "best practices," namely programs that encourage executive
ownership and strengthen the alignment of executives and Bank Plus
stockholders.
ANNUAL CASH COMPENSATION
Base Salary
Each year, the Committee reviews the salary levels of the executive officers
for external competitiveness, internal equity, and individual contribution;
however, salary increases are generally administered in 18 month or longer
cycles, excluding promotional adjustments. Based on input from management, the
Committee develops its recommendations for salary increases, if any, and
presents them to the Board for approval.
6
<PAGE>
At its January 1997 meeting, the Board approved 1997 salary increases for
executive officers. Messrs. Condon and Stutz each received a 25% increase
effective immediately, representing the first salary increase each executive
had received since 1994. Mr. Evans received a 11% increase and Mr. Taylor
received a 23% increase, both effective in June 1997. Messrs. Evans and Taylor
last received salary increases as of January 1996. The Board eliminated car
allowances for executives. Each executive who had been entitled to a car
allowance, including the President of the Bank and each Executive Vice
President ("EVP") named above, received an annual salary increase equal to the
annual car allowance amount of $13,800.
Annual Incentive Plan
In early 1997, the Board approved the 1997 Annual Incentive Plan for the
Chief Executive Officer (the "CEO"), the President of the Bank, all EVPs and
selected Senior Vice Presidents who have a significant impact on corporate
performance. Target incentive awards were set at 30% of salary for Senior Vice
Presidents, 50% for the President of the Bank and EVPs, and 60% for the CEO.
Awards were capped at 200% of those targets (or 60%, 100% and 120% of salary,
respectively). Performance measures include net income (before preferred
dividends), stock price growth versus the SNL thrift index, and business
unit/individual performance.
To further encourage executive stock ownership, at the beginning of each
year, the Committee may determine an exchange formula, if any, for
participants to receive all or a portion of their earned award in the form of
restricted stock, deferred stock units, or stock options. For 1997, the
exchange formula provided $2.00 of restricted stock for each dollar of annual
incentive payment foregone. The stock will vest ratably over a three-year
period from grant.
Following the close of the year, the Committee reviewed the Company's 1997
performance against the established goals. For purposes of the incentive plan,
the target net income before preferred dividend goal was established at $15.5
million (consistent with the previously approved business plan). Although the
Company achieved net income, as so defined, of $16.9 million (or 109% of
target), management proposed, and the Committee agreed to recommend for Board
approval, that incentive awards for net income performance be based on
performance at 100% (rather than 109%) in consideration of the quality of the
net income earned. For the President of the Bank and EVPs, this resulted in an
incentive award of 25% of base salary for net income performance.
Stock price growth did not attain established minimum performance levels
and, therefore, no awards based on stock price growth were recommended.
Business unit/individual performance for the President of the Bank and the
EVPs was assessed by the CEO against established goals tied to pre-tax
earnings of assigned business units, expense management and attainment of key
initiatives. On an overall basis, the President of the Bank and the EVPs
exceeded their target goals in this performance area, and the Committee agreed
to recommend for Board approval awards ranging from 15% to 25% of base salary
for business unit/individual performance.
1997 annual incentive awards for Messrs. Austin, Condon, Evans, Stutz and
Taylor are 42.5%, 40%, 50%, 40% and 41%, respectively. With the exception of
Mr. Evans, these awards are below the overall target incentive opportunity of
50% of base salary. The total amount of these awards is $482,463, of which all
or a portion may be exchanged voluntarily for restricted stock on the terms
described above. Each executive has indicated that he will take some or all of
his award in the form of restricted stock.
The Committee is in the process of preparing the 1998 annual incentive plan.
The Committee intends to examine additional or alternative measures of
performance for determining 1998 annual incentive awards.
7
<PAGE>
EXECUTIVE OWNERSHIP
It is the Committee's goal that stock ownership be a significant component
of the executive compensation program to align stockholder and executive
interests and to encourage executive retention. To this extent, executives are
eligible for grants of stock options, restricted stock and deferred stock
units, and, as noted above, can elect to receive annual incentive awards in
the form of restricted stock. The Committee believes the Company's Stock
Option and Equity Incentive Plan provides the necessary means for Bank Plus to
reward executives with a significant opportunity to build a meaningful stake
in the Company, and assist in the retention of key employees.
CEO COMPENSATION
The Committee applies the same philosophy and methodology in determining the
compensation of the CEO as with all other executive officers. Pursuant to his
contract, Mr. Greenwood was not eligible for a salary increase until August
1997. At the January 1997 Board meeting, an increase of 20.5% was approved, to
take effect September 1, 1997. Mr. Greenwood had not received a salary
increase since June 1994. As with all other executives, the Committee agreed
to eliminate the CEO car allowance and incorporate the current annual amount
into Mr. Greenwood's base salary effective September 1997, resulting in an
annual base salary of $520,040.
The CEO participated in the 1997 Annual Incentive Plan, which rewards net
income results, stock price growth, and individual performance. Mr.
Greenwood's target award level was 60% of his year-end base salary. The
performance measures were weighted so that target and maximum performance
resulted in the following incentive award levels by performance measure:
<TABLE>
<CAPTION>
PERFORMANCE MEASURE TARGET INCENTIVE MAXIMUM INCENTIVE
------------------- ---------------- -----------------
<S> <C> <C>
Net Income.............. 30% of 1997 base salary 60% of 1997 base salary
Stock Price Growth...... 15% of 1997 base salary 30% of 1997 base salary
Individual Performance.. 15% of 1997 base salary 30% of 1997 base salary
----------------------- ------------------------
Overall............... 60% of 1997 base salary 120% of 1997 base salary
</TABLE>
No incentive award was recommended for stock price growth since minimum
performance was not attained.
In assessing Mr. Greenwood's individual performance for 1997, the Committee
considered the significant contributions he made in key business initiatives,
including establishment of a process to systemically improve the multi-family
portfolio, completing strategic acquisitions, and spearheading entry into
programs and business opportunities that are intended to result in significant
future earnings for the Company.
Upon its assessment of the CEO's overall performance and the agreed-upon
approach to reward net income performance at 100% of target versus 109% (see
"Annual Incentive Plan" above), the Committee agreed to recommend for Board
approval a 1997 annual incentive award equal to 50% of base salary, or
$260,000, of which all or a portion may be voluntarily exchanged for
restricted stock at the terms described above. This is below his overall
target incentive opportunity of 60% of base salary.
Mr. Greenwood will participate in the 1998 annual incentive plan.
8
<PAGE>
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code limits the deduction a publicly
held company is allowed for compensation paid to its highly compensated
executive officers. Generally, amounts in excess of $1 million (other than
performance-based compensation) paid in any tax year to a covered executive
cannot be deducted. The Committee will continue to monitor the compensation
levels of the executive officers and determine the appropriate response to
Section 162(m), including considering ways to maximize the deductibility of
executive compensation while retaining the discretion the Committee deems
necessary to compensate executive officers in a manner commensurate with
performance and the competitive environment, when and if necessary.
The foregoing report has been furnished by the following members of the
Compensation Committee:
Mark Sullivan III, Chairman
Lilly V. Lee
Gordon V. Smith
With respect to periods prior to October 29, 1997:
Norman Barker, Jr., Chairman
Gordon V. Smith
9
<PAGE>
PERFORMANCE GRAPH
The performance graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act or under the Exchange Act except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such acts or regulations.
The graph and corresponding table below compare the cumulative total
stockholder return on the Company's (or its predecessor's) Common Stock from
March 31, 1996 to December 31, 1997 with the cumulative total return on a S&P
500 index and the Wall Street Journal Savings & Loan Index, in each case
assuming the investment of $100 on March 31, 1996 at the closing price on that
date and reinvestment of dividends. The measurement period with respect to
which the comparisons are made corresponds to the period during which the
Company's (or its predecessor's) Common Stock has been registered under Section
12 of the Exchange Act.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG WALL STREET JOURNAL S&L INDEX,
S&P 500 INDEX AND BANK PLUS FROM MARCH 31, 1996 THROUGH DECEMBER 31, 1997
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period WALL STREET S&P
(Fiscal Quarter Covered) JOURNAL S&L 500 INDEX BANK PLUS
- ------------------------ ----------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 3/31/96 $100 $100 $100
FQE 6/30/96 $103.1 $104.5 $ 92.1
FQE 9/30/96 $113.4 $101.8 $111.8
FQE 12/31/96 $127.2 $118.2 $121.1
FQE 3/31/97 $146 $123.5 $109.2
FQE 6/30/97 $179.5 $132.5 $114.5
FQE 9/30/97 $219.3 $140.4 $135.5
FQE 12/31/97 $219.6 $149.2 $132.9
</TABLE>
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the compensation earned
during the three years ended December 31, 1997 by the Company's Chief
Executive Officer and the four other most highly compensated executive
officers during 1997 who were serving as executive officers at December 31,
1997 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
------------------ ----------------------
SECURITIES
RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL STOCK STOCK COMPEN-
POSITION YEAR SALARY(1) BONUS(1) AWARD(S)(2) OPTIONS SATION(3)
- ------------------ ---- --------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Greenwood 1997 $464,205 $ (4) $ -- $ --
President & CEO of
Bank Plus; 1996 415,000 287,500(5) -- -- --
Chairman & CEO of Fi-
delity 1995 415,000 150,000(5) -- 300,000 23,492(6)
James E. Stutz 1997 $284,665 $ (4) $ -- $ --
President & COO of Fi-
delity 1996 220,000 125,000(5) -- -- --
1995 220,000 50,000(5) -- 168,750 --
Robert P. Condon 1997 $284,665 $ (4) $ -- $ --
Executive Vice Presi-
dent of 1996 220,000 125,000(5) -- -- 1,125
Fidelity; CEO of Gate-
way 1995 220,000 50,000(5) -- 168,750 4,500
Godfrey B. Evans 1997 $197,300 $ (4) $ -- $ --
Executive Vice Presi-
dent & 1996 175,000 100,000(5) -- -- 1,125
General Counsel of 1995 160,000 50,000(5) -- 143,750 4,500
Bank Plus and
Fidelity
W.C. Taylor III 1997 $179,511 $ (4) $ -- $ --
Executive Vice Presi-
dent & 1996 159,423 95,000 -- -- 1,125
Chief Lending Officer
of Fidelity 1995 130,000 70,380 -- 100,000 4,500
</TABLE>
- --------
(1) Amounts shown for 1997 include cash compensation earned and received by
the executive officer as well as amounts earned but deferred at the
election of those officers under the Company's Deferred Compensation Plan.
Bonuses for 1995 and 1996 are presented in the period earned and may have
been paid in subsequent years.
(2) Dollar amount shown equals the number of shares of restricted stock
granted multiplied by the closing stock price on the grant date. All
grants were made under the 1997 Annual Incentive Plan, pursuant to which
recipients of bonus awards were entitled to elect to receive all or any
portion of their bonus in the form of restricted stock, at an exchange
formula of $2.00 of restricted stock for each dollar of cash bonus
foregone. Awards of restricted stock will vest ratably over a three-year
period: the first third vests on January 1, 1999, the second on January 1,
2000, and the third on January 1, 2001, subject to forfeiture if the
officer is not employed by the Company or the Bank on the relevant vesting
date. In addition, receipt of the awards may be subject to further
deferral at the election of the officer under the Company's Deferred
Compensation Plan. The grant date for all awards was March 12, 1998, and
the closing price of the Company's Common Stock on the grant date was
$14.50 per share. See footnote (4) below for the total bonus granted to
each Named Executive Officer under the 1997 Annual Incentive Plan.
(3) Except as otherwise noted, consists of the Company's matching
contributions to the Company's 401(k) Plan.
(4) All amounts represent the cash portion of bonus awards earned under the
1997 Annual Incentive Plan, whether such amounts were actually received or
deferred at the election of the officer. In addition to cash amounts
reflected in the "Bonus" column, the Named Executive Officers were
entitled to elect to receive
11
<PAGE>
all or any portion of their bonus under the 1997 Annual Incentive Plan in
the form of restricted stock, at an exchange formula of $2.00 of restricted
stock for each dollar of cash bonus foregone. Awards to the Named Executive
Officers under the 1997 Annual Incentive Plan were as follows: Mr.
Greenwood was awarded $260,000, of which he elected to receive $________
in cash and the remainder in restricted stock at the 2-for-1 exchange
formula, resulting in an award of _____ shares of restricted stock (with a
market value of $______ based on the per share price of $14.50); Mr. Stutz
was awarded $115,520, of which he elected to receive $___________ in cash
and the remainder in restricted stock, resulting in an award of
shares of restricted stock (with a market value of $______); Mr. Condon was
awarded $115,520, of which he elected to receive $___________ in cash and
the remainder in restricted stock, resulting in an award of _____ shares of
restricted stock (with a market value of $______); Mr. Evans was awarded
$104,400, of which he elected to receive $___________ in cash and the
remainder in restricted stock, resulting in an award of _____ shares of
restricted stock (with a market value of $______); Mr. Taylor was awarded
$77,408, of which he elected to receive $___________ in cash and the
remainder in restricted stock, resulting in an award of _____ shares of
restricted stock (with a market value of $______). All of the foregoing
awards are subject to additional deferral at the election of the officers
under the Company's Deferred Compensation Plan.
(5) Includes 50% of a Recapitalization Transaction and Retention Bonus awarded
in October 1995. The bonus was paid in two equal installments: the first
in November 1995, the remainder in December 1996. All Named Executive
Officers who received the November 1995 award purchased Fidelity common
stock with their net proceeds. Payment of the second installment in
December 1996 was conditioned on the executive remaining an employee of
the Bank until that time. Mr. Greenwood was awarded a bonus of $300,000;
Messrs. Condon, Evans and Stutz were awarded bonuses of $100,000 each.
(6) Consists of compensation for unused vacation time.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
No options to acquire shares of Common Stock were granted by the Company to
any of the Named Executive Officers during 1997.
UNEXERCISED STOCK OPTIONS
During 1997, none of the Named Executive Officers exercised any stock
options. The following table provides information concerning unexercised
options held by the Named Executive Officers as of the end of 1997.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT YEAR-END(1)
YEAR-END EXERCISABLE/
NAME EXERCISABLE/UNEXERCISABLE UNEXERCISABLE
---- ------------------------- ----------------------
<S> <C> <C>
Richard M. Greenwood........ 120,000/180,000 $513,000/$769,500
Robert P. Condon............ 67,500/101,250 $288,563/$432,844
Godfrey B. Evans............ 57,500/ 86,250 $245,813/$368,719
James E. Stutz.............. 67,500/101,250 $288,563/$432,844
W.C. Taylor III............. 40,000/ 60,000 $171,000/$256,500
</TABLE>
- --------
(1) Based upon the difference between the option exercise price of $8.35 per
share and the closing price of the Common Stock on December 31, 1997 of
$12.625 per share.
On December 11, 1995 the Board of Directors of Fidelity adopted the 1996
Stock Option Plan and granted awards pursuant thereto, subject to subsequent
approval by the Bank's stockholders. At a special meeting held on February 9,
1996, Fidelity's stockholders approved the 1996 Stock Option Plan.
Accordingly, Fidelity's non-employee directors, executive officers and certain
other key employees received options to purchase Fidelity common stock. In May
1996, Bank Plus assumed the 1996 Stock Option Plan in connection with the
Reorganization, and the options granted thereunder became options to purchase
Bank Plus Common Stock. The exercise price of all such options is $8.35 per
share. Ten percent of the options granted became exercisable on
12
<PAGE>
February 13, 1996, an additional thirty percent of such options became
exercisable on each of February 9, 1997 and February 9, 1998, and the final
thirty percent of the options will become exercisable on February 9, 1999. On
April 30, 1997, the Company's stockholders approved certain amendments to and
a restatement of the Plan, which was renamed the Bank Plus Corporation Stock
Option and Equity Incentive Plan.
RETIREMENT INCOME (DEFINED BENEFIT) PLAN
Fidelity maintains a Retirement Income Plan which is a qualified, non-
contributory defined benefit retirement plan. The Retirement Income Plan
provides for monthly retirement payments or an actuarially equivalent lump sum
to or on behalf of each covered employee or beneficiary upon retirement at age
65 or upon early retirement (i.e., the attainment of age 55 and the completion
of 10 years of service) and, under certain circumstances, upon disability,
death or other termination of employment, based upon the employee's average
monthly salary and the aggregate number of years of service. Effective
February 28, 1994, the Retirement Income Plan was suspended, thereby freezing
benefit levels and reducing related expense accruals by approximately $1
million annually.
The following table illustrates approximate annual benefits payable under
the Retirement Income Plan at normal retirement age for various combinations
of service and compensation:
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------
AVERAGE FINAL
COMPENSATION 15 20 25 30 35
------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 50,000............................ $11,302 $15,069 $18,836 $22,603 $26,370
100,000............................ 24,427 32,569 40,711 48,853 56,995
150,000............................ 37,552 50,069 62,586 75,103 87,620
200,000............................ 37,552 50,069 62,586 75,103 87,620
250,000............................ 37,552 50,069 62,586 75,103 87,620
300,000............................ 37,552 50,069 62,586 75,103 87,620
350,000............................ 37,552 50,069 62,586 75,103 87,620
400,000............................ 37,552 50,069 62,586 75,103 87,620
</TABLE>
Compensation under the Retirement Income Plan includes all regular pay,
excluding overtime, commissions and bonuses, limited by the Internal Revenue
Code Section 401(a)(17) compensation limit. The benefit amounts listed above
were computed on a 10-year certain and life basis, which is the normal form
under the plan, and are not subject to deduction for Social Security or other
offset amounts.
The years of credited service as of December 31, 1997 for each of the Named
Executive Officers are as follows:
<TABLE>
<CAPTION>
CREDITED
NAME SERVICE YEARS
- ---- -------------
<S> <C>
Richard M. Greenwood.............................................. 1 year
Robert P. Condon.................................................. None(1)
Godfrey B. Evans.................................................. 6 years
James E. Stutz.................................................... None(1)
W.C. Taylor III................................................... None(1)
</TABLE>
- --------
(1) No participation due to plan suspension on February 28, 1994.
13
<PAGE>
EMPLOYMENT AGREEMENT; SEVERANCE AND CHANGE IN CONTROL AGREEMENTS
Mr. Greenwood and the Bank entered into a new employment agreement in August
1997, providing for his employment as President and Chief Executive Officer of
the Bank until August 2000, subject to extension, at an annual base salary of
at least $520,000. If Mr. Greenwood's employment is terminated other than for
cause or because of death, disability or retirement, his employment agreement
provides that he will receive, subject to certain limitations, his full base
salary until the second anniversary of the date of termination, plus a lump
sum payment equal to two times his average annual bonus during the prior two
fiscal years. Mr. Greenwood has also entered into a change in control
agreement with Fidelity pursuant to which, in the event of a change in control
of the Bank, Mr. Greenwood would receive a lump sum payment in the amount of
three times the sum of (1) his base salary at the time of the change in
control, (2) his average annual bonus for the past three years and (3) an
amount equal to the matching contribution he would have received under the
Bank's 401(k) plan if he had made the maximum contribution under the plan
during the year in which the change in control occers. In addition, if Mr.
Greenwood's employment is terminated within twenty-four months following a
change in control, his health and welfare benefits will continue for three
years, or until he receives equivalent benefits from a new employer or reaches
the age of sixty-five.
Fidelity has also entered into severance and change in control agreements
(the "Severance Agreements") with certain other executive officers providing
for benefits (a) in the event of a change in control of the Bank and (b) upon
termination without cause. The purpose of the Severance Agreements is (i) to
secure the employment of key executives, (ii) to ensure that executive
management is reasonably compensated in the light of competitive industry
practices and (iii) to ensure that the executive management team is able to
concentrate on advising the Board of Directors and maintaining stability in
the event of a change in control of the Bank.
The initial term of each Severance Agreement is three years, with one-year
renewals thereafter, subject to Board review and approval before each renewal.
After a change in control, the Severance Agreement will continue automatically
for two years. A "change in control" is generally defined in the Severance
Agreement (and in Mr. Greenwood's change in control agreement) as: (a)
acquisition of 25% or more of the Bank's voting stock by any "person" (as
defined) with certain limited exclusions or (b) change in a majority of the
members of the Board of Directors over a two-year period or (c) stockholder
approval of a merger or consolidation other than a merger or consolidation
that results in the Bank owning 60% or more of the surviving entity or (d) the
Bank entering into one or more agreements to sell or transfer to one or more
third parties, in one transaction or a series of related transactions, assets
and/or liabilities representing 50% percent or more of the book value of its
assets and/or liabilities. Each Severance Agreement will be terminated if the
officer or the Bank experiences certain regulatory problems.
Termination by the Bank because of disability, retirement or cause, or the
officer's resignation (other than for "good reason" as described below) does
not entitle the officer to any benefits under the Severance Agreement.
Termination for "cause" requires either (i) a willful and continued failure of
an officer to perform substantially all of such officer's duties or (ii)
certain acts of dishonesty, incompetence or illegality. Termination by an
officer for "good reason" means that an officer may terminate such officer's
own employment and still receive benefits under the Severance Agreement if
(among other reasons listed in the agreement) (1) such officer's status or
position in the Bank has adversely changed from the date of the Severance
Agreement, (2) the officer's base salary is reduced from its level on the date
of the Severance Agreement, (3) the Bank fails to credit the officer for the
correct number of vacation days, (4) the Bank requires the officer to be based
at an office more than thirty-five miles from such officer's office on the
date of the Severance Agreement or (5) after a change in control, either (a)
the Bank fails to continue any benefit plan in which the officer was
participating prior to the change in control or (b) the Bank does not allow
the officer to continue to engage in any business or civic activities not
related to the business of the Bank in which it had, before the change in
control, allowed the officer to participate.
In the event of a termination without "cause" or the officer's resignation
for "good reason," Messrs. Condon and Stutz would each receive 2.0 times the
sum of (1) his annual base salary plus (2) his average
14
<PAGE>
annual bonus for the past two years, and Messrs. Austin, Evans and Taylor
would receive an amount equal to 1.5 times such amounts.
In the event of a change in control, each of Messrs. Condon and Stutz would
receive a lump sum payment in the amount of three times the sum of (1) his
base salary at the time of the change in control, (2) his average annual bonus
for the past three years and (3) an amount equal to the matching contribution
he would have received under the Bank's 401(k) plan if he had made the maximum
contribution under the plan during the year in which the change in control
occurs. Messrs. Austin, Evans and Taylor would receive an amount equal to two
times the sum of such amounts in the event of a change in control. In
addition, if any of such officers' employment is terminated within twenty-four
months following a change in control, his health and welfare benefits will
continue for three years (in the case of Messrs. Condon and Stutz) or two
years (in the case of Messrs. Austin, Evans and Taylor) or until he receives
equivalent benefits from a new employer or reaches the age of sixty-five.
Each officer is entitled to reimbursement for legal expenses for matters
arising under the Severance Agreement following a change in control of the
Bank unless a court finds that the officer seeks reimbursement of funds for
litigating a position that a court determines was frivolous or brought in bad
faith.
DIRECTOR COMPENSATION
Board Retainer and Fees. Board of Directors retainer and meeting fee
schedules for non-employee members of the Board of Directors are as follows:
(1) Board membership annual retainer of $25,000; (2) Committee Chairmanship
annual retainer of $3,000 (except for the Chairman of the Audit Committee, who
receives an annual retainer of $6,000); (3) Board meeting fees of $1,000 per
meeting; and (4) Committee meeting fees of $850 per meeting. In February 1997,
the Board approved an increase in the annual retainer to $30,000 for all
directors who receive their retainers and fees in the form of deferred stock
grants under the Non-Employee Director Compensation Program described below.
At its meeting on January 28, 1998, the Board approved an increase in the
annual retainer for the Board Chairman from $10,000 to $60,000. In addition,
the Board approved up to $500 per month as reimbursement for secretarial and
other administrative expenses of Miller & Smith, Inc. related to the
activities of Mr. Smith in his capacity as Chairman of the Board. Telephonic
Board or Committee meetings fees are paid at the same rate as in-person
meetings, except that telephonic meetings lasting less than 30 minutes are
paid at 50% of the normal meeting fee rate. Any director who fails to attend
at least 50% of the meetings held in any consecutive six-month period may
forfeit a portion or all of his/her retainer for the subsequent six months,
unless absences were due to illness or unavoidable circumstances, as approved
by the Chairman of the Board. Directors are also reimbursed for reasonable
out-of-pocket expenses incurred in the performance of their duties.
Non-Employee Director Retirement Plan. In November 1994, the Board of
Directors of Fidelity approved a retirement plan for non-employee directors
who have at least three years of Board service, including service on the Board
prior to the 1994 restructuring and recapitalization by Citadel and the Bank,
and have reached the age of 55. Only directors initially elected prior to
January 1, 1996 are eligible to participate in this plan.
An eligible director shall, after termination from Board service for any
reason other than cause, be entitled to receive a quarterly payment equal to
one quarter of his/her average annual compensation (including compensation for
service on the Board of any of the Company's subsidiaries), including all
retainers and meeting fees, received during his/her last three years of Board
service. Such payments shall commence at the beginning of the first fiscal
quarter subsequent to termination and continue for a 3-year period. If a
director's Board membership is terminated for cause, no benefits are payable
under this plan.
If a director's Board membership is terminated within two years following
the effective date of a change in control, then he/she also shall be eligible
for a lump sum payment in an amount that is the greater of: (1) 150% times
average annual compensation during the preceding 3-year period, (2) the sum of
all retirement benefits payable under normal retirement provisions described
in the preceding paragraph or (3) $78,000.
15
<PAGE>
Stock Option and Equity Incentive Plan. On December 11, 1995, the Board of
Directors of the Bank adopted the 1996 Stock Option Plan and granted awards
pursuant thereto to its non-employee directors subject to subsequent approval
by the Bank's stockholders. At a special meeting held on February 9, 1996 the
Bank's stockholders approved the plan and in May 1996, Bank Plus assumed the
plan in connection with the Reorganization. Accordingly, each of the Company's
and the Bank's non-employee directors has received options representing 23,000
shares of Common Stock. All such options were granted at an exercise price of
$8.35 per share. Ten percent of the options granted to each non-employee
director became exercisable immediately upon stockholder approval and another
thirty percent became exercisable on the first anniversary of such approval;
an additional thirty percent will become exercisable on each of the second and
third anniversaries of stockholder approval. On April 30, 1997, the Company's
stockholders approved certain amendments to and a restatement of the Plan,
which was renamed the Bank Plus Corporation Stock Option and Equity Incentive
Plan. Among other things, the amended Plan provides that each non-employee
director of Bank Plus and Fidelity will receive automatic annual grants of
options to purchase 2,500 shares of Common Stock, at an exercise price equal
to the fair market value of the stock on the grant date, which will be fully
vested and exercisable upon grant.
Non-Employee Director Compensation Program. As part of the Stock Option and
Equity Incentive Plan, the Company's stockholders also approved the Non-
Employee Director Compensation Program. The program is designed to strengthen
the relationship between directors and stockholders by aligning their
interests through stock ownership. Under the program, non-employee directors
initially elected to the Board on or after January 1, 1996 will receive no
cash compensation; their retainers and meeting fees will be paid in the form
of deferred stock grants. Other non-employee directors may do so on a
voluntary basis, until the annual meeting of stockholders in the year 2000,
when it will become mandatory for all directors to receive their retainers and
fees in the form of deferred stock grants. For example, assuming attendance at
twelve Board meetings and eight committee meetings, annual earnings of a
director who chairs one committee (other than the Audit Committee) would be
$51,800. At a stock price of $14.25 (the closing price for the Common Stock on
March 2, 1998), a director would have 3,635 shares credited to his or her
deferred stock account.
Other Compensation. In addition to his retainer and other fees, Mr. Gibbs
was paid a $3,400 consulting fee for services related to the Bank's employee
survey and disaster recovery plan.
RELATED PARTY TRANSACTIONS
LOANS TO MANAGEMENT
Fidelity offers home loans to directors, officers, and employees of the
Bank. These loans are made in the ordinary course of business and, in the
judgment of management, do not involve more than the normal risk of
collectibility. The loans are secured by real property and are made on
substantially the same terms, including interest rate and collateral, as those
prevailing at the time for comparable transactions with non-affiliated
persons.
However, pursuant to the provisions of Fidelity's employee loan program
which existed prior to the enactment of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"), the interest rate generally
charged was one-half percent less than the rate for comparable transactions
with non-affiliated persons on fixed-rate loans and was one percent below the
margin on adjustable-rate loans. In addition, employees generally do not pay
loan fees or closing costs on their loans. The rate on these types of loans
remain at the reduced level only for so long as the individual obtaining the
loan continues to be employed by, or serves as a director of, the Bank. Since
the passage of FIRREA, Federal Reserve Board regulations applicable to savings
institutions prohibit the making of preferential loans to directors and
executive officers of Fidelity who perform policy-making functions.
Accordingly, Fidelity no longer grants such loans to any director or any
officer who influences corporate policy. No such loans made prior to the
enactment of FIRREA are currently outstanding.
In 1996, the Board of Directors approved a personal loan to Mr. Greenwood in
the principal amount of $265,000. The loan is payable on demand and is
interest free. The proceeds of the loan were used by
16
<PAGE>
Mr. Greenwood to refinance an existing loan that had been made to Mr.
Greenwood by Citadel in 1992 when Mr. Greenwood commenced his employment with
Citadel.
INSURANCE COMMISSIONS
J&H Marsh & McLennan ("J&H") (previously known as Johnson & Higgins) served
in 1997 as insurance broker for the Company. During 1997, the Company paid to
J&H insurance premiums of approximately $3.3 million, with respect to which
the Company has been advised that J&H has retained commissions of
approximately $100,000. Mr. Gibbs, a director of Bank Plus and of Fidelity,
was a principal and senior vice president of J&H until his retirement in 1997.
FIRST ALLIANCE TRANSACTION
Fidelity has entered into an agreement with First Alliance Corporation
("FACO") pursuant to which FACO functions as Fidelity's strategic ally in the
development of real estate secured credit card receivables. Fidelity will
issue Visa and Mastercard credit cards and provide funding, up to a maximum
aggregate amount of $175,000,000, with individual credit limits of $5,000 to
$12,000. FACO will provide credit enhancement to mitigate any loss exposure
Fidelity may have. Mark Mason, a member of the board of directors of Fidelity,
is Executive Vice President and Chief Financial Officer and a director of
FACO. George Gibbs, Jr., a director of both Bank Plus and Fidelity, is also a
director of FACO.
BENEFICIAL OWNERSHIP OF BANK PLUS CAPITAL STOCK
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the shares of Common Stock beneficially owned
as of March 2, 1998 by all directors and executive officers as a group, by
each director, the CEO and the Named Executive Officers of the Company during
1997.
<TABLE>
<CAPTION>
SHARES OF COMMON SHARES UNDERLYING
STOCK OPTIONS EXERCISABLE TOTAL
BENEFICIALLY WITHIN 60 DAYS OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNED MARCH 2, 1998(1) OWNERSHIP COMMON STOCK
- ------------------------ ---------------- ------------------- ---------- ------------
<S> <C> <C> <C> <C>
Norman Barker, Jr....... 1,250 18,600 19,850 *
Waldo H. Burnside....... 2,000 17,225 19,225 *
George Gibbs, Jr........ 625 18,600 19,225 *
Lilly V. Lee............ 1,250 18,600 19,850 *
Gordon V. Smith (2)..... 100,112 2,500 102,612 *
Mark Sullivan III....... 2,750 2,500 5,250 *
Richard M. Greenwood.... 12,500 210,000 222,500 1.2%
Robert P. Condon........ 12,500 118,125 130,625 *
Godfrey B. Evans........ 5,250 100,625 105,875 *
James E. Stutz.......... 6,250 118,125 124,375 *
W.C. Taylor III......... 12,500 70,000 82,500 *
All directors and execu-
tive officers
as a group (14 per-
sons).................. 156,987 703,650 860,637 4.4%
</TABLE>
- --------
(1) Options exercisable within 60 days of March 2, 1998 that were granted
pursuant to the Stock Option and Equity Incentive Plan. See "Executive
Compensation" and "Director Compensation" for discussion of the amounts
and terms of such options.
(2) Shares are registered in the name of Gordon V. and Helen C. Smith
Foundation, a Section 501(3)(c) organization of which Mr. Smith is
president.
*Represents less than one percent of the outstanding shares of Common Stock.
17
<PAGE>
SECURITY OWNERSHIP BY OTHERS
The following table sets forth, as of March 2, 1998, (i) the name of each
person known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) the total number of shares of Common Stock
beneficially owned by each person and (iii) the percentage of all Common Stock
outstanding held by each such person.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) COMMON STOCK
- ------------------------------------ --------------------- ------------
<S> <C> <C>
Tontine Partners, L.P........................ 1,881,000(2) 9.7%
Tontine Financial Partners, L.P.
Tontine Management, L.L.C.
Tontine Overseas Associates, L.L.C.
Jeffrey L. Gendell
31 West 52nd Street
New York, NY 10019
Boston Partners, Inc......................... 1,003,682(3) 5.2%
Boston Partners Asset Managers, L.P.
Desmond John Heathwood
One Financial Center, 43rd Floor
Boston, MA 02111
Jenswold, King and Associates, Inc........... 1,117,211(4) 5.8%
Two Post Oak Central
1980 Post Oak Blvd., Suite 2400
Houston, TX 77056
Franklin Resources, Inc...................... 979,700 5.1%
901 Mariners Island Blvd., 6th Floor
San Mateo, CA 94404
</TABLE>
- --------
(1) Except as otherwise indicated, the persons listed as beneficial owners of
the shares have the sole voting and investment power with respect to such
shares.
(2) Tontine Partners, L.P. has shared voting power and shared investment power
with respect to 246,000 of these shares. Tontine Financial Partners, L.P.
has shared voting power and shared investment power with respect to
955,200 of these shares. Tontine Management, L.L.C. has shared voting
power and shared investment power with respect to 1,201,200 of these
shares. Tontine Overseas Associates, L.L.C. has shared voting power and
shared investment power with respect to 680,000 of these shares. Jeffrey
L. Gendell has shared voting power and shared investment power with
respect to all of these shares.
(3) Boston Partners, Inc., Boston Partners Asset Managers, L.P. and Desmond
John Heathwood share voting and investment power with respect to these
shares, as reported on a Schedule 13G dated February 9, 1998.
(4) Jenswold, King and Associates, Inc. has sole investment power with respect
to all of these shares, and sole voting power with respect to 979,012 of
these shares, according to a Schedule 13G dated January 13, 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the directors and executive
officers of the Company to file reports of ownership and changes in ownership
of their equity securities of the Company. Directors and executive officers
are required to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such reports received by it
during or with respect to the year ended December 31, 1997, and/or written
representations from such reporting persons, the Company believes that all
reports required to be filed by such reporting persons during or with respect
to the year ended December 31, 1997 were timely filed, except as follows: Gary
W. Brummett, the former Executive Vice President and Chief Financial Officer
of the Company and Fidelity, Dennis J. McNamara, Senior Vice President and
Treasurer of Fidelity, and Richard M. Villa, Senior Vice President and
Controller of the Company and Fidelity, each filed his initial report of
beneficial ownership on Form 3 late.
18
<PAGE>
PROPOSAL NUMBER 2:
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO CHANGE THE COMPANY'S NAME TO
IBANK CORPORATION
At its meeting on January 28, 1998, the Bank Plus Board of Directors voted
to approve, subject to stockholder approval, an amendment to the Company's
Certificate of Incorporation (the "Amendment") to change the Company's name to
iBank Corporation. The text of the Board's resolutions and of the proposed
Amendment are set forth in full in APPENDIX A.
The Board, and the board of directors of Fidelity, are also considering an
amendment to Fidelity's charter to change the name of the Bank to iBank. Such
a change, if approved by both boards of directors, would be subject to the
approval or non-objection of the Office of Thrift Supervision (the "OTS").
Although no decision has yet been made regarding the possible change in the
name of the Bank, it is anticipated that a decision will be made before the
end of 1998. It is the Board's intent to effect the proposed Amendment to
change the Company's name only if the name of the Bank is also changed. In
order to obtain the required stockholder approval without the need to hold a
special meeting of stockholders for that purpose later in 1998, the Board is
seeking approval of the proposed Amendment at this time.
The Board believes that the name change would represent an important step in
the Company's evolution from a traditional thrift to a technologically-
sophisticated financial institution able to compete in the 21st century.
The name iBank was chosen to emphasize the Company's basic philosophy of
being the "agent for the customer," allowing customers to do business with the
Company when, where and how they want. In addition to emphasizing the
Company's customer-focused strategy, the Board believes the name change would
give the Company and the Bank a more contemporary and promotable image, and
reduce the confusion that currently exists with existing and potential
customers due to the plethora of financial institutions whose name includes
the word "Fidelity."
Fidelity is currently doing business using the name iBank in certain of its
branch locations. iBank is also the name of the Bank's new transactional
Internet site (www.iBank.com), which is currently in pilot mode and will open
to the public later this year. The Internet bank will offer checking and
saving products and a bill-paying service, and later enhancements are expected
to include financial planning, loan application and discount brokerage
functions.
In approving the proposed Amendment, the Board also approved a resolution
that would permit the Board to abandon the proposed Amendment without further
action by the stockholders at any time prior to the effectiveness of the
proposed Amendment. This resolution is intended to give the Board the
flexibility to decide not to effect the proposed name change, notwithstanding
the approval of the Amendment by the stockholders, if the Board deems it to be
in the best interest of the Company. Circumstances under which the Board might
choose to abandon the proposed Amendment would include, but would not be
limited to, a decision not to proceed with the change in the name of the Bank
, or the failure of the OTS to approve the change in the name of the Bank. By
voting to approve the proposed Amendment, stockholders are also voting to
ratify the Board's resolution authorizing it to abandon the proposed Amendment
at any time prior to its effectiveness.
APPROVAL
Approval of the Amendment requires the affirmative vote of a majority of the
outstanding shares of Bank Plus Common Stock. The Board of Directors believes
that the approval of the Amendment is in the best interests of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION AS SET FORTH IN
PROPOSAL NUMBER 2.
19
<PAGE>
PROPOSAL NUMBER 3: RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
In accordance with the requirements of the Company's Bylaws, the Board of
Directors is required to select independent public accountants as auditors of
the Company for 1998, subject to ratification or rejection by stockholders.
The Board of Directors recommends to stockholders their ratification of the
Board's selection of Deloitte & Touche LLP as the Company's independent public
accountants for 1998. Deloitte & Touche LLP has been the independent certified
public accountants for the Company or the Bank since 1976. Representatives of
Deloitte & Touche LLP are expected to be in attendance at the Annual Meeting
with the opportunity to make a statement if they desire to do so and respond to
appropriate questions, if any, directed to them.
The Company has also engaged Deloitte & Touche LLP to render various types of
non-audit professional and consulting services for the Company, including
assistance with respect to the Company's and the Bank's internal audit
function, tax planning services and consulting services relating to business
operations, process improvements and cost reduction. The compensation for such
non-audit services during 1998 is expected to be substantially in excess of the
compensation to be paid to Deloitte & Touche LLP for audit services during such
period.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
SELECTION OF ACCOUNTANTS AS SET FORTH IN PROPOSAL NUMBER 3.
STOCKHOLDER PROPOSALS
Any stockholder of the Company wishing to submit a proposal for inclusion in
the proxy statement relating to the Company's 1999 annual meeting of
stockholders must deliver such proposal to the Company at its principal office
at 4565 Colorado Boulevard, Los Angeles, California 90039 on or before November
30, 1998. The Board of Directors will review any proposals from eligible
stockholders which it receives by that date and will determine whether any such
proposal will be included in its 1999 proxy solicitation materials.
OTHER MATTERS
At the time of preparation of this Proxy Statement, the Board of Directors of
the Company was not aware of any other matters to be brought before the Annual
Meeting. However, if any other matters are properly presented for action, it is
the intention of the persons named in the enclosed form of proxy to vote, or
refrain from voting, in accordance with their respective best judgment on such
matters.
FINANCIAL INFORMATION
Enclosed herewith is a copy of the Company's Annual Report on Form 10-K,
including financial statements for the year ended December 31, 1997, as filed
with the Securities and Exchange Commission.
By Order of the Board of Directors,
/s/ Godfrey B. Evans
Godfrey B. Evans
Corporate Secretary
Los Angeles, California
March [30], 1998
20
<PAGE>
PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can vote your shares. Accordingly, please contact
the person responsible for your account and give instructions for your shares
to be voted.
If you have any questions, or have any difficulty voting your shares, please
contact the Company by calling (818) 549-3116.
21
<PAGE>
APPENDIX A
BANK PLUS CORPORATION
RESOLUTIONS OF THE BOARD OF DIRECTORS
JANUARY 28, 1998
WHEREAS, the Board deems it advisable for the Company to amend its
Certificate of Incorporation in order to change the Company's name to "iBank
Corporation";
NOW, THEREFORE, BE IT RESOLVED, that the Certificate of Incorporation of
this Company be amended by changing the Article thereof numbered "FIRST" so
that, as amended, said Article shall be and read as follows:
"The name of the corporation is iBank Corporation"; and
RESOLVED, that such proposed amendment be submitted to the stockholders of
the Company for their approval at the 1998 Annual Meeting; and
RESOLVED, that, at any time prior to the effectiveness of the filing of the
proposed amendment set forth above with the Secretary of State of Delaware,
notwithstanding the approval of the proposed amendment by the stockholders of
the Company, the Board of Directors may abandon such proposed amendment
without further action by the stockholders.
A-1
<PAGE>
[PRELIMINARY]
- -------------------------------------------------------------------------------
REVOCABLE PROXY
THIS REVOCABLE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BANK PLUS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS--APRIL 29, 1998
The undersigned hereby acknowledges receipt of the accompanying Notice of
Annual Meeting of Stockholders of Bank Plus Corporation (the "Company"), dated
March 30, 1998, and the related Proxy Statement, and revoking all prior
proxies, appoints and constitutes James E. Stutz and Stephen J. Austin, or
either of them, each with full power of substitution, as the lawful proxies and
agents to represent the undersigned and vote, in the name, place and stead of
the undersigned, all of the shares of the Common Stock, $.01 par value, of the
Company which the undersigned would be entitled to vote if personally present
at the Annual Meeting of Stockholders of the Company to be held at 4565
Colorado Boulevard, Los Angeles, California on Wednesday, April 29, 1998, at
11:00 a.m., local time, or any adjournments or postponements thereof, for the
following matters and in the manner designated below:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW, FOR THE
--- ---
APPROVAL OF PROPOSAL 2 AND FOR THE APPROVAL OF PROPOSAL 3.
---
MARK HERE FOR
ADDRESS CHANGE [_]
AND NOTE ON REVERSE
SEE REVERSE
SIDE
(Continued and to be signed on other side)
- -------------------------------------------------------------------------------
<PAGE>
- -----------------------------------------------------------------------------
[X] PLEASE MARK YOUR
VOTES AS AS IN THIS
EXAMPLE.
THIS REVOCABLE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND, IF NOT
OTHERWISE DIRECTED, IT WILL BE VOTED FOR THE NOMINEES AND PROPOSALS LISTED
BELOW.
1. Election of Directors: FOR ALL AUTHORITY WITHHELD
NOMINESS (TO VOTE ALL NOMINEES)
[_] [_]
NOMINEES: Norman Barker, Jr., Robert P.
Condon and Gordon V. Smith
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.
- ---------------------------------
2. Proposal 2: Approval of an amendment to the Company's Certificate of
Incorporation to change the name of the Company to "iBank Corporation".
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal 3: Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent public accountants for 1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
IMPORTANT--PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED EN-
VELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
Signature(s): Date:
------------------------------------ -----------------------
Signature(s): Date:
------------------------------------ -----------------------
NOTE: (PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS CARD. JOINT OWNERS SHOULD
EACH SIGN. ATTORNEYS-IN-FACT, EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS OR
CORPORATION OFFICERS SHOULD GIVE FULL TITLE. THIS PROXY SHALL BE VALID AND MAY
BE VOTED REGARDLESS OF THE FORM OF SIGNATURE, HOWEVER.)
- -----------------------------------------------------------------------------
